Manila Hotel Corporation vs National Labor
Relations Commission
GR NO. 120077 OCTOBER 13, 2000
In May 1988, Marcelo Santos was an overseas worker
in Oman. In June 1988, he was recruited by Palace
Hotel in Beijing, China. Due to higher pay and
benefits, Santos agreed to the hotels job offer and so
he started working there in November 1988. The
employment contract between him and Palace Hotel
was however without the intervention of the
Philippine Overseas Employment Administration
(POEA). In August 1989, Palace Hotel notified Santos
that he will be laid off due to business reverses. In
September 1989, he was officially terminated.
In February 1990, Santos filed a complaint for illegal
dismissal against Manila Hotel Corporation (MHC)
and Manila Hotel International, Ltd. (MHIL). The
Palace Hotel was impleaded but no summons were
served upon it. MHC is a government owned and
controlled corporation. It owns 50% of MHIL, a
foreign corporation (Hong Kong). MHIL manages the
affair of the Palace Hotel. The labor arbiter who
handled the case ruled in favor of Santos. The
National Labor Relations Commission (NLRC) affirmed
the labor arbiter.
ISSUE: Whether or not the NLRC has jurisdiction over
the case.
HELD: No. The NLRC is a very inconvenient forum for
the following reasons:
[if !supportLists]1. [endif]The only link that the
Philippines has in this case is the fact that Santos is a
Filipino;
[if !supportLists]2. [endif]However, the Palace Hotel
and MHIL are foreign corporations MHC cannot be
held liable because it merely owns 50% of MHIL, it has
no direct business in the affairs of the Palace Hotel.
The veil of corporate fiction cant be pierced because
it was not shown that MHC is directly managing the
affairs of MHIL. Hence, they are separate entities.
[if !supportLists]3. [endif]Santos contract with the
Palace Hotel was not entered into in the Philippines;
[if !supportLists]4. [endif]Santos contract was
entered into without the intervention of the POEA
(had POEA intervened, NLRC still does not have
jurisdiction because it will be the POEA which will
hear the case);
[if !supportLists]5. [endif]MHIL and the Palace Hotel
are not doing business in the Philippines; their
agents/officers are not residents of the Philippines;
Due to the foregoing, the NLRC cannot possibly
determine all the relevant facts pertaining to the
case. It is not competent to determine the facts
because the acts complained of happened outside
our jurisdiction. It cannot determine which law is
applicable. And in case a judgment is rendered, it
cannot be enforced against the Palace Hotel (in the
first place, it was not served any summons).
The Supreme Court emphasized that under the rule
of forum non conveniens, a Philippine court or agency
may assume jurisdiction over the case if it chooses to
do so provided:
(1) that the Philippine court is one to which the
parties may conveniently resort to;
(2) that the Philippine court is in a position to make an
intelligent decision as to the law and the facts; and
(3) that the Philippine court has or is likely to have
power to enforce its decision.
None of the above conditions are apparent in the case
at bar.
G.R. No. L-12582 January 28, 1961
LVN PICTURES, INC.,
vs.
PHILIPPINE MUSICIANS Guild (FFW) and COURT OF
INDUSTRIAL RELATIONS,
LVN PICTURES, INC. vs. PHILIPPINE MUSICIANS Guild
(FFW) & COURT OFINDUSTRIAL RELATIONS
SAMPAGUITA PICTURES, INC. vs. PHILIPPINE
MUSICIANS Guild (FFW) & COURT OF
INDUSTRIALRELATIONS
FACTS:
Respondent Philippine Musicians Guild (FFW) is a duly
registered legitimate labor organization. LVN
Pictures, Inc., Sampaguita Pictures, Inc., and Premiere
Productions, Inc. are corporations, duly organized
under the Philippine laws, engaged in the making of
motion pictures and in the processing and
distribution thereof. Petitioner companies employ
musicians for the purpose of making music recordings
for title music, background music, musical numbers,
finale music and other incidental music, without
which a motion picture is incomplete. Ninety-five
(95%) percent of all the musicians playing for the
musical recordings of said companies are members of
the Guild.
The Guild has no knowledge of the existence of any
other legitimate labor organization representing
musicians in said companies. Premised upon these
allegations, the Guild prayed that it be certified as the
sole and exclusive bargaining agency for all musicians
working in the aforementioned companies. In their
respective answers, the latter denied that they have
any musicians as employees, and alleged that the
musical numbers in the filing of the companies are
furnished by independent contractors. The lower
court sustained the Guilds theory. A reconsideration
of the order complained of having been denied by the
Court en banc,LVN Pictures, inc., and Sampaguita
Pictures, Inc., filed these petitions for review for
certiorari.
ISSUE:
Whether the musicians in question(Guild members)
are employees of the petitioner film companies.
RULING: YES
The Court agreed with the lower courts decision, to
wit:
Lower court resorted to apply R.A. 875 and US Laws
and jurisprudence from which said Act was patterned
after. (Since statutes are to be construed in the light
of purposes achieved and the evils sought to be
remedied). It ruled that the work of the musical
director and musicians is a functional and integral
part of the enterprise performed at the same studio
substantially under the direction and control of the
company.
In other words, to determine whether a person who
performs work for another is the latter's employee or
an independent contractor, the National Labor
Relations relies on 'the right to control' test . Under
this test an employer-employee relationship exist
where the person for whom the services are
performed reserves the right to control not only the
end to be achieved, but also the manner and means
to be used in reaching the end. (United
InsuranceCompany, 108, NLRB No. 115.).
Notwithstanding that the employees are called
independent contractors', the Board will hold them to
be employees under the Act where the extent of the
employer's control over them indicates that the
relationship is in reality one of employment.(John
Hancock Insurance Co., 2375-D, 1940, Teller, Labor
Dispute Collective Bargaining, Vol.).
The right of control of the film company over the
musicians is shown (1) by calling the musicians
through 'call slips' in 'the name of the company; (2) by
arranging schedules in its studio for recording
sessions; (3) by furnishing transportation and meals
to musicians; and(4) by supervising and directing in
detail, through the motion picture director, the
performance of the musicians before the camera, in
order to suit the music they are playing to the picture
which is being flashed on the screen.
The musical directors have no such control over the
musicians involved in the present case. Said musical
directors control neither the music to be played, nor
the musicians playing it. The Premier Production did
not appeal the decision of the Court en banc (thats
why its not one of the petitioners in the case) film
companies summon the musicians to work, through
the musical directors. The film companies, through
the musical directors, fix the date, the time and the
place of work. The film companies, not the musical
directors, provide the transportation to and from the
studio. The film companies furnish meal at dinner
time. It is well settled that "an employer-employee
relationship exists . . .where the person for whom the
services are performed reserves a right to control not
only the end to be achieved but also the means to be
used in reaching such end . . . ."
The decisive nature of said control over the "means to
be used", is illustrated in the case of Gilchrist Timber
Co., et al., in which, by reason of said control, the
employer-employee relationship was held to exist
between the management and the workers,
notwithstanding the intervention of an alleged
independent contractor, who had, and exercise, the
power to hire and fire said workers
. The aforementioned control over the means to be
used" in reading the desired end is possessed
andexercised by the film companies over the
musicians in the cases before us.
WHEREFORE, the order appealed from is hereby
affirmed, with costs against petitioners herein. It is so
ordered
Republic v. Asiapro Cooperative (G.R. No. 172101)
Nov. 23, 2007
Facts:
Respondent cooperative (Asiapro) is composed of
owners-members, with its primary objectives to
provide savings and credit facilities and to develop
other livelihood services for the latter. In discharge of
the said objectives, respondent cooperative entered
into several Service Contracts with Stanfilco.
Respondents owners-members requested Stanfilcos
help in registering them with SSS as self-employed
and to remit their contributions.
Petitioner SSS informed respondent that being
actually a manpower contractor supplying employees
to Stanfilco, respondent itself should register with SSS
as an employer and remit the premium contributions.
Respondent continuously ignoring the demand of SSS,
the latter then filed before the SSC. Respondent
moved to dismiss the complaint alleging that there
exists no employer-employee relationship. SSC
denied the motion and likewise denied the
reconsideration. Respondent filed a petition before
the CA which was granted. Aggrieved, SSS moved for
reconsideration, but was denied. Hence, this petition.
Issue:
Whether or not there is employer-employee
relationship between respondent cooperative and its
owners-members.
Ruling:
In determining the existence of an employer-
employee relationship, the following elements are
considered: (1) the selection and engagement of the
workers; (2) the payment of wages by whatever
means; (3) the power of dismissal; and (4) the power
to control the workers conduct, with the latter
assuming primacy in the overall consideration. The
most important element is the employers control of
the employees conduct, not only as to the result of
the work to be done, but also as to the means and
methods to accomplish. The power of control refers to
the existence of the power and not necessarily to the
actual exercise thereof. It is not essential for the
employer to actually supervise the performance of
duties of the employee; it is enough that the employer
has the right to wield that power. All the aforesaid
elements are present in this case.
First. It is expressly provided in the Service Contracts
that it is the respondent cooperative which has the
exclusive discretion in the selection and engagement
of the owners-members as well as its team leaders
who will be assigned at Stanfilco. Second. Wages are
defined as remuneration or earnings, however
designated, capable of being expressed in terms of
money, whether fixed or ascertained, on a time, task,
piece or commission basis, or other method of
calculating the same, which is payable by an employer
to an employee under a written or unwritten contract
of employment for work done or to be done, or for
service rendered or to be rendered. In this case, the
weekly stipends or the so-called shares in the service
surplus given by the respondent cooperative to its
owners-members were in reality wages, as the same
were equivalent to an amount not lower than that
prescribed by existing labor laws, rules and
regulations, including the wage order applicable to
the area and industry; or the same shall not be lower
than the prevailing rates of wages. It cannot be
doubted then that those stipends or shares in the
service surplus are indeed wages, because these are
given to the owners-members as compensation in
rendering services to respondent cooperatives client,
Stanfilco. Third. It is also stated in the above-
mentioned Service Contracts that it is the respondent
cooperative which has the power to investigate,
discipline and remove the owners-members and its
team leaders who were rendering services at
Stanfilco. Fourth. As earlier opined, of the four
elements of the employer-employee relationship, the
control test is the most important. In the case at
bar, it is the respondent cooperative which has the
sole control over the manner and means of
performing the services under the Service Contracts
with Stanfilco as well as the means and methods of
work. Also, the respondent cooperative is solely and
entirely responsible for its owners-members, team
leaders and other representatives at Stanfilco. All
these clearly prove that, indeed, there is an employer-
employee relationship between the respondent
cooperative and its owners-members.
As previously pointed out by this Court, an
employee-employer relationship actually exists
between the respondent cooperative and its
owners-members. The four elements in the four-fold
test for the existence of an employment relationship
have been complied with. The respondent
cooperative must not be allowed to deny its
employment relationship with its owners-members
by invoking the questionable Service Contracts
provision, when in actuality, it does exist. The
existence of an employer-employee relationship
cannot be negated by expressly repudiating it in a
contract, when the terms and surrounding
circumstances show otherwise. The employment
status of a person is defined and prescribed by law
and not by what the parties say it should be.
It bears stressing, too, that a cooperative acquires
juridical personality upon its registration with the
Cooperative Development Authority. It has its Board
of Directors, which directs and supervises its
business; meaning, its Board of Directors is the one in
charge in the conduct and management of its affairs.
With that, a cooperative can be likened to a
corporation with a personality separate and distinct
from its owners-members. Consequently, an owner-
member of a cooperative can be an employee of the
latter and an employer-employee relationship can
exist between them.
WHEREFORE, premises considered, the instant
Petition is hereby GRANTED. The Decision and the
Resolution of the CA are hereby REVERSED and SET
ASIDE. The Orders of the petitioner SSC are hereby
REINSTATED. The petitioner SSC is hereby DIRECTED
to continue hearing the petition-complaint filed
before it by the petitioner SSS as regards the
compulsory coverage of the respondent cooperative
and its owners-members.
(10) calendar days from receipt of such decisions,
awards, or orders.
In case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon
the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the
Commission in the amount equivalent to the
monetary award in the judgment appealed from.

The requirement that the employer post a cash or

G.R. No. 155207 August 13, 2008
WILHELMINA S. OROZCO, petitioner,
vs.
THE FIFTH DIVISION OF THE HONORABLE COURT OF
APPEALS, PHILIPPINE DAILY INQUIRER, and LETICIA
JIMENEZ MAGSANOC, respondents.
Wilhelmina Orozco was hired as a writer by the
Philippine Daily Inquirer (PDI) in 1990. She was the
columnist of Feminist Reflections under the
Lifestyle section of the publication. She writes on a
weekly basis and on a per article basis (P250-
300/article).
surety bond to perfect its/his appeal is apparently
intended to assure the workers that if they prevail in
the case, they will receive the money judgment in
their favor upon the dismissal of the employers
appeal. It was intended to discourage employers from
using an appeal to delay, or even evade, their
obligation to satisfy their employees just and lawful
claims.
But in this case, this principle is relaxed by the
Supreme Court considering the fact that the Labor
Arbiter, in ruling that the Orozco is entitled to
backwages, did not provide any computation.

In 1991, Magsanoc as the editor-in-chief sought to
improve the Lifestyle section of the paper. She said
there were too many Lifestyle writers and that it was
time to reduce the number of writers. Orozcos
column was eventually dropped.
The case is then remanded to the Labor Arbiter for the
computation. This necessarily pended the resolution
of the other issue of whether or not there exists an
employer-employee relationship between PDI and
Orozco.

Orozco filed for a case for Illegal Dismissal against PDI

and Magsanoc. Orozco won in the Labor Arbiter. The
LA ruled that there exists an employer-employee
relationship between PDI and Orozco hence Orozco is
entitled to receive backwages, reinstatement, and
13th month pay.

PDI appealed to the National Labor Relations

Commission. The NLRC denied the appeal because of
the failure of PDI to post a surety bond as required by
Article 223 of the Labor Code. The Court of Appeals
reversed the NLRC.

ISSUE: Whether or not there exists an employer-

employee relationship between PDI and Orozco.
Whether or not PDIs appeal will prosper.

HELD: Under Article 223 of the Labor Code:

ART. 223. Appeal. Decisions, awards or orders of the
Labor Arbiter are final and executory unless appealed
to the Commission by any or both parties within ten